The author is a Forbes contributor. The opinions expressed are those of the writer.

Loading ...

Loading ...

This story appears in the {{article.article.magazine.pretty_date}} issue of {{article.article.magazine.pubName}}. Subscribe

Didn’t win the $640 million last week? I don’t think too many people were surprised they weren’t among the three people that split the Powerball lottery with the odds being at 175 million to 1. Despite miniscule odds, millions of people played, and to the extent they limited their purchase to a single ticket, they may have actually been better off by doing so. A losing lottery ticket used correctly can actually be a wealth creation tool. Here are three ways losing can make you wealthy:

Lottery ticket winners don’t necessarily end up wealthier. Many end up bankrupt or broke within a short period of time. In an article published last August in The Review of Economics and Statistics, researchers found that more than 1,900 Florida lottery winners went bankrupt within five years, suggesting that lottery players were twice as likely to file for bankruptcy as the general population. The study also found that large lottery winners were less likely than small lottery winners to go bankrupt within the first two years, but the odds of bankruptcy were equal after five. It was as if the additional funds just postponed the inevitable. Even the Certified Financial Planner Board of Standards estimates that nearly one third of lottery winners will become bankrupt.

Lottery winners aren’t necessarily happier than non-winners either. In a legendary study following 22 lottery winners, researchers Brickman, Coates, and Janoff-Bulman, found that lottery winners were no happier than the control group of non-winners. Another widely quoted study by Daniel Kahneman and Angus Deaton reports that once someone reached the magic income level of $75,000, there was no additional day-to-day happiness. We are happier when we are engaged in what is important to us and using our talents to their highest use.

Buying the ticket itself creates new possibilities. When someone buys a lottery ticket, what is the first thing they do? Their brain immediately fires off a series of synapses as they think of a million ideas of what they will do with the money. They are literally “brainstorming.” In that moment of making the ticket purchase, the purchaser does something rare – they open their mind to endless possibilities. They take off limits they normally placed on themselves. A lottery ticket provides the perfect catalyst for creative ideas. Often called the father of brainstorming, Alex Osborn outlines four guidelines for a successful idea creation in his book Applied Imagination. They are:

suspension of criticism

freewheeling – the wilder the idea, the better

quantity is welcome – let the ideas flow and consider as many as possible

combination and improvement are sought – adding to the ideas of others